It’s Time to Finalize the New Contact Lens Rule

(C. Jarrett Dieterle) – Even in a legal system rife with examples of cronyist laws and favoritism, America’s contact lens market has always stood out for its protectionism. This is because, for decades, the industry was set up so that patients were required to both obtain prescriptions from eye doctors and purchase their contact lenses from those same doctors. The result was that consumers were often pushed into buying certain brands and prevented from enjoying the benefits of competition in the marketplace.In 2003, based on the inherent problems with a model that positioned doctors as both prescribers and sellers, Congress brought much-needed competition to the industry by passing the Fairness to Contact Lens Consumers Act. The law required eye doctors to provide patients with a copy of their prescription, thereby making it easier for patients to purchase contacts from an alternative source. The Federal Trade Commission was tasked with implementing the law, which it did when it promulgated its Contact Lens Rule in 2004.

The Contact Lens Rule created a sort of patient’s bill of rights by clarifying that eye doctors could not charge fees for prescriptions, patients could not be forced to buy lenses from doctors after an exam, and alternate retailers could automatically issue lenses if a doctor failed to respond within eight hours of receiving a verification request for a prescription.

The rule brought about notable changes in the contact lens industry, including an increase in the number of Americans who purchased lenses (from 36 million in 2005 to nearly 41 million by 2015). Research also suggests a modest decrease in optometrists’ earnings as a result of the erosion of their monopoly power over lens sales.

Unfortunately, despite these advancements, the on-the-ground effect of the Contact Lens Rule has been weaker than many hoped. That’s because some eye doctors have simply neglected—or refused—to release prescriptions to patients as mandated by the rule. To address these issues, the FTC, starting in 2015, proposed amendments to the Contact Lens Rule that would require eye doctors to provide patients with an acknowledgement form to be signed, informing them of their rights to a prescription and the ability to purchase lenses from other retailers. Eye doctors would then have to keep the form on-file for three years.

Many optometrist groups have opposed even this modest tweak, claiming that it would create burdensome paperwork hassles and suggesting that it would be easier and equally effective to place signs in optometrist offices informing patients of their rights. Putting aside the tenuous claim that signage would be just as effective as a signed acknowledgement—after all, when’s the last time anyone read the employment law posters in their workplace cafeteria?—it’s clear that having patients sign a simple form is a very minor requirement. All laws must include enforcement mechanisms to ensure that they are being properly followed, and signed acknowledgements are about as low-impact a way of ensuring compliance as is possible.

While there are many helpful reforms that could and should be pursued when it comes to ocular health markets, the FTC’s proposed amendments would improve competition in a meaningful way. But despite the clear progress the new rule would usher in, the FTC has yet to finalize these updates. Thus, four years later, consumers and retailers are still operating without important certainty surrounding contact lenses. It’s far past time for the FTC to stick to its guns and finish what it started. Consumers deserve as much.

Mr. Dieterle is a Senior Fellow at the R Street Institute who researches and writes on regulatory affairs, alcohol policy, occupational licensing and other commercial freedom issues

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